Property buyers wait and watch for further drop in prices

Demand in all segments – apartments, land plots, townhouses, and villas – decreased by 50-90% in the first three months of this year despite declining prices.

A survey by investment consulting firm Mogin Holdings found that people are hesitant about borrowing because they are worried about the high credit interest rates.

Luong Dinh Thuy Van, Mogin CEO, said it is usually difficult to identify the bottom when a correction cycle is occurring, and so the urge to wait for the price to drop further before buying is very strong.

Tran Khanh Quang, general director of real estate investment firm Viet An Hoa, said the real estate market is in its deepest slump in half a decade, with surveys finding the average fall in real estate prices to be 25-30%, even 30-50% in some suburban and remote locations in the south.

A slowdown in the downtrend could be a sign the bottom is approaching, he said. In the current cycle, developers and buyers are still wary.

Meanwhile, Nguyen Loc Hanh, general director of Ngoc Chau A, a property developer, said prospective buyers remain on the sidelines, and this could continue in the second quarter.

The cases of developers who are unable to repay banks or have gone bust have also created a sense of fear in the market.

Hanh also said people looking to buy property should pay attention to global factors since, in an interlinked world, what happens in one country has an immediate effect on others.

Investors’ hesitation could last for a long time because of the resource crunch, he warned.